The news that we will see a 70,000 shortfall in seniors’ homes over the next decade is a timely reminder that ‘generation rent’ is not the only age group facing a housing crisis.
The shortage of elderly accommodation supply is largely a result of a surge in demand from an ageing population and in the UK, it is estimated that there will be more than 20 million people aged over 60 by 2030.
Without urgent steps to develop greater capacity, the UK faces nothing short of an elderly care crisis.
Understandably, against a backdrop of tight government budgets, the ability of local authorities to increase supply is under immense pressure, but recent research shows that only 55% of local authorities are taking necessary measures to accommodate the UK’s ageing population.
Indeed, there are several steps that local authorities can take to help reduce current pressure on the existing supply of elderly accommodation, freeing up resource that can be reinvested into new capacity.
Once such step is better deployment of revenues obtained through the Community Infrastructure Levy, a charge that can be levied by local authorities on new development in their area to help them deliver the infrastructure to match increased demand. Currently, a large portion of this goes towards administrative costs rather than the health and social care sectors.
Technology also presents another huge opportunity to reduce pressure on current supply. Equipping the elderly with modern technological capabilities, such as trackers and sensors, allows them to remain home and independent for longer. These technologies can also be deployed in existing care homes to drive efficiencies and cost savings that can be reinvested into the development of further capacity.
All evidence suggests that growing consumer demand and investor appetite for diversified assets are encouraging more institutional investors to back development of seniors’ residences. This is an important step that will inject the much-needed capital that the sector is currently lacking.
However, growing interest by institutional investors won’t solve the shortage of elderly care accommodation overnight. We must therefore capitalise on the steps we can take now to ensure that all senior members of society have access to safe and appropriate care as they grow old.
Jitesh Patel, project director, Kajima Partnerships